Harvest One Cannabis Inc: Why This $0.28 Pot Stock Could Soar

Harvest One Cannabis Inc: Why This $0.28 Pot Stock Could Soar
iStock.com/Светлана Зайцева

This Low-Priced Pot Stock Could Be an Opportunity

If you want to get some exposure to the fast-growing cannabis industry but don’t want to spend too much money, Harvest One Cannabis Inc (OTCMKTS:HRVOF, CVE:HVT) stock deserves a look.

Headquartered in Vancouver, British Columbia, Canada, Harvest One is a global cannabis company that develops and provides health, wellness, and self-care products.

The company operates through four main wholly-owned subsidiaries: licensed cannabis producer United Greeneries Ltd., medical and nutraceutical business Satipharm, natural sleep aid producer Dream Water, and topical company Delivra Corp.

Harvest One also has a minority interest in British Columbia-based pot retailer Burb Cannabis.

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Like many smaller pot companies, Harvest One Cannabis Inc is listed on the TSX Venture Exchange. But because its shares also trade over the counter under the ticker symbol “HRVOF,” it’s very convenient for U.S. investors to get a piece of the action.

Today, the No. 1 reason to consider this pot stock is the growth potential of its subsidiary United Greeneries, which produces cannabis for both the recreational and medical markets.

United Greeneries currently has agreements to supply recreational pot to four of the 10 Canadian provinces: British Columbia, Manitoba, Ontario, and Saskatchewan.

It also has a supply agreement with Shoppers Drug Mart, the largest pharmacy chain in Canada, for medical cannabis.

Other than being a licensed producer, United Greeneries has obtained a license from Health Canada that allows it to sell cannabis oil products.

According to Harvest One’s latest investor presentation, United Greeneries expects to bring its annual premium craft flower production capacity up to 20,000 kilograms (44,092 pounds) by the end of 2019. (Source: “Harvest One: A Global Portfolio of Brands,” Harvest One Cannabis Inc, last accessed October 9, 2019.)

United Greeneries plans to have diversified cultivation operations: an indoor facility in Duncan, British Columbia, an indoor and outdoor facility in Lucky Lake, Saskatchewan, and a greenhouse facility in Lynden, Ontario.

And something good just happened with one of the facilities.

A Catalyst for Harvest One Cannabis Stock

On October 7, Harvest One announced that United Greeneries has received a cultivation license from Health Canada for Phase I of a new facility in Duncan. (Source: “Harvest One Announces Receipt of New Cultivation License,” Harvest One Cannabis Inc, October 7, 2019.)

This is a big deal for the pot stock. With the new license, United Greeneries can immediately start growing cannabis in its new facility located next to its existing facility in Duncan. Once the new facility is fully completed, the company will be able to triple its production capacity in Duncan.

“The issuing of this new license from Health Canada represents another key accomplishment for Harvest One as we continue to execute on our projects and plans to be a leading producer of premium indoor-grown cannabis,” said Harvest One’s Chief Executive Officer Grant Froese. (Source: Ibid.)

Because Harvest One Cannabis Inc is a relatively small player in the pot industry right now, such an increase in production capacity could translate to some serious growth in its financials.

Better yet, as it stands, the company is already churning out some very impressive numbers.

For instance, in the three months ended March 31, Harvest One generated CA$3.0 million in net revenue. Compared to the CA$33,000 of net revenue earned in the year-ago period, that’s a year-over-year growth rate of about 9,000%! (Source: “Harvest One Reports Third Quarter Financial Results and Provides Company Update,” Harvest One Cannabis Inc, May 30, 2019.)

Don’t forget, growing and selling pot is not Harvest One’s only business. The company also has other growth drivers, such as Dream Water, one of the first movers in the over-the-counter sleep aid market.

Dream Water has been approved by both the U.S. Food and Drug Administration and Health Canada and is currently sold in over 30,000 stores, including Walmart, Kroger, and Shoppers Drug Mart.

Harvest One Cannabis Inc (OTCMKTS:HRVOF) Stock Chart

Chart courtesy of StockCharts.com

Analyst Take

Stocks in the pot industry experienced a serious sell-off in recent months, and Harvest One Cannabis stock took a beating, too. Year-to-date, HRVOF stock is down about six percent and currently trades at just $0.27 apiece.

However, with a fast-growing business and production capacity set to triple at a major cannabis cultivation facility, Harvest One Cannabis Inc could make a strong comeback.